The Almanack of Naval Ravikant: A Guide to Wealth and Happiness

by Eric Jorgenson

Corollary: Applied Scientists are the most powerful people in the world. This will be more obvious in the coming years.

Specific knowledge is found much more by pursuing your innate talents, your genuine curiosity, and your passion. It’s not by going to school for whatever is the hottest job; it’s not by going into whatever field investors say is the hottest.

Very often, specific knowledge is at the edge of knowledge. It’s also stuff that’s only now being figured out or is really hard to figure out. If you’re not 100 percent into it, somebody else who is 100 percent into it will outperform you. And they won’t just outperform you by a little bit—they’ll outperform you by a lot because now we’re operating the domain of ideas, compound interest really applies and leverage really applies. [78]

You can go on the internet, and you can find your audience. And you can build a business, and create a product, and build wealth, and make people happy just uniquely expressing yourself through the internet. [78]

The internet enables any niche interest, as long as you’re the best person at it to scale out. And the great news is because every human is different, everyone is the best at something—being themselves.

“Escape competition through authenticity.”

If you are fundamentally building and marketing something that is an extension of who you are, no one can compete with you on that. Who’s going to compete with Joe Rogan or Scott Adams? It’s impossible. Is somebody else going to come along and write a better Dilbert? No. Is someone going to compete with Bill Watterson and create a better Calvin and Hobbes? No. They’re being authentic. [78]

The best jobs are neither decreed nor degreed. They are creative expressions of continuous learners in free markets.

The most important skill for getting rich is becoming a perpetual learner. You have to know how to learn anything you want to learn. The old model of making money is going to school for four years, getting your degree, and working as a professional for thirty years. But things change fast now. Now, you have to come up to speed on a new profession within nine months, and ...

It’s much more important today to be able to become an expert in a brand-new field in nine to twelve months than to have studie...

Foundations are super important. [74] Basic arithmetic and numeracy are way more important in life than doing calculus. Similarly, being able to convey yourself simply using ordinary English words is far more important than being able to write poetry, having an extensive vocabulary, or speaking seven different foreign languages.

Knowing how to be persuasive when speaking is far more important than being an expert digital marketer or click optimizer. Foundations are key. It’s much better to be at 9/10 or 10/10 on foundations than to try and get super deep into things.

You do need to be deep in something because otherwise you’ll be a mile wide and an inch deep and you won’t get what you want out of life. You can only achieve mastery in one or two thin...

Intentions don’t matter. Actions do. That’s why being ethical is hard.

When you find the right thing to do, when you find the right people to work with, invest deeply. Sticking with it for decades is really how you make the big returns in your relationships and in your money. So, compound interest is very important. [10]

99% of effort is...

When you’re dating, the instant you know this relationship is not going to be the one that leads to marriage, you should probably move on. When you’re studying something, like a geography or history class, and you realize you are never going to use the information, drop the class. It’s a waste of time. It’s a waste of your brain energy. I’m not saying don’t do the 99 percent, because it’s very hard to identify what the 1 percent is. What I’m saying is: when you find the 1 percent of your discipline which will not be wasted, which you’ll be able to invest in for the rest of your life and has meaning to you—go all-in and forget about the rest. [10]

but we’re still socially hardwired to not fail in public under our own names. The people who have the ability to fail in public under their own names actually gain a lot of power.

Realize that in modern society, the downside risk is not that large. Even personal bankruptcy can wipe the debts clean in good ecosystems. I’m most familiar with Silicon Valley, but generally, people will forgive failures as long as you were honest and made a high-integrity effort. There’s not really that much to fear in terms of failure, and so people should take on a lot more accountability than they do. [78]

Essentially, you’re working for somebody else, and that person is taking on the risk and has the accountability, the intellectual property, and the brand. They’re not going to pay you enough. They’re going to pay you the bare minimum they have to, to get you to do their job. That can be a high bare minimum, but it’s still not going to be true wealth where you’re retired but still earning. [78]

If you don’t own equity in a business, your odds of making money are very slim.

Everybody who really makes money at some point owns a piece of a product, a business, or some IP. That can be through stock options if you work at a tech company. That’s a fine way to start. But usually, the real wealth is created by starting your own companies or even by investing. In an investment firm, they’re buying equity. These are the routes to wealth. It doesn’t come through the hours. [78]

Following your genuine intellectual curiosity is a better foundation for a career than following whatever is making money right now. [11]

Knowledge only you know or only a small set of people knows is going to come out of your passions and your hobbies, oddly enough. If you have hobbies around your intellectual curiosity, you’re more likely to develop these passions. [1]

If it entertains you now but will bore you someday, it’s a distra...

The less you want something, the less you’re thinking about it, the less you’re obsessing over it, the more you’re going to do it in a natural way. The more you’re going to do it for yourself. You’re going to do it in a way you’re good at, and you’re going to stick with it. The people around you will see the quality of your work is higher. [1]

You’re more likely to have skills society does not yet know how to train other people to do. If someone can train other people how to do something, then they can replace you. If they can replace you, then they don’t have to pay you a lot. You want to know how to do something other people don’t know how to do at the time period when those skills are in demand. [1]

If they can train you to do it, then eventually they will train a computer to do it.

You get rewarded by society for giving it what it wants and doesn’t know...

Think about what product or service society wants but does not yet know how to get. You want to become the person who delivers it and delivers it at scale. That is really the challenge of how to make money.

Now, the problem is becoming good at whatever “it” is. It moves around from generation to generation, but a lot of it happens to be in technology.

You are waiting for your moment when something emerges in the world, they need a skill set, and you’re uniquely qualified. You build your brand in the meantime on Twitter, on YouTube, and by giving away free work. You make a name for yourself, and you take some risk in the process. When it is time to move o...

The most interesting and the most important form of leverage is the idea of products that have no marginal cost of replication. This is the new form of leverage. This was only invented in the last few hundred years. It started with the printing press. It accelerated with broadcast media, and now it’s really blown up with the internet and with coding. Now, you can multiply your efforts without involving other humans and without needing money from other humans.

Coding, writing books, recording podcasts, tweeting, YouTubing—these kinds of things are permissionless. You don’t need anyone’s permission to do them, and that’s why they are very egalitarian. They’re great equalizers of leverage. [78] Every great software developer, for example, now has an army of robots working for him at nighttime while he or she sleeps, after they’ve written the code, and it’s cranking away. [78]

You’re never going to get rich renting out your time.

Whenever you can in life, optimize for independence rather than pay. If you have independence and you’re accountable on your output, as oppos...

Inputs don’t match outputs, especially for leveraged workers.

What you want in life is to be in control of your time. You want to get into a leveraged job where you control your own time and you’re tracked on the outputs. If you do something incredible to move the needle on the business, they have to pay you. Especially if they don’t know how you did it because it’s innate to your obsession or your skill or your innate abilities, they’re going to have to keep paying you to do it.

If you have specific knowledge, you have accountability and you have leverage; they have to pay you what you’re worth. If they pay you what you’re worth, then you can get your time back—you can be hyper-efficient. You’re not doing meetings for meetings’ sake, you’re not trying to impress other people, you’re not writing things...

Where you don’t necessarily want to be is a support role, like customer service. In customer service, unfortunately, inputs and outputs relate relatively close to each other, and the hours you put in matter. [10]

The higher the creativity component of a profession, the more likely it is to have disconnected inputs and outputs. If you’re looking at professions where your inputs and your outputs are highly connected, it’s going to be very hard to create wealth and make wealth for yourself in that process. [78]

Learn to sell, learn to build. If you can do both, you will be unstoppable.

Selling doesn’t necessarily just mean selling to individual customers, but it can mean marketing, it can mean communicating, it can mean recruiting, it can mean raising money, it can mean inspiring people, it could mean doing PR. It’s a broad umbrella category. [78]

Earn with your mind, not your time.

You start as a salaried employee. But you want to work your way up to try and get higher leverage, more accountability, and specific knowledge. The combination of those over a long period of time with the magic of compound interest will make you wealthy. [74]

The one thing you have to avoid is the risk of ruin. Avoiding ruin means stay out of jail. So, don’t do anything illegal. It’s never worth it to wear an orange jumpsuit. Stay out of total catastrophic loss. Avoiding ruin could also mean you stay out of things that could be physically dangerous or hurt your body. You have to watch your health.

Stay out of things that could cause you to lose all of your capital, all of your savings. Don’t gamble everything on one go. Instead, take rational...

I think every human should aspire to being knowledgeable about certain things and being paid for our unique knowledge. We have as much leverage as is possible in our business, whether it’s through robots or computers or what have you. Then, we can be masters of our own time because we are just being tracked on outputs and not inputs.

We waste our time with short-term thinking and busywork. Warren Buffett spends a year deciding and a day acting. That act lasts decades.

Value your time at an hourly rate, and ruthlessly spend to save time at that rate. You will never be worth more than you think you’re worth.